LONDON: Oil prices fell on Friday as analysts continued to forecast a supply surplus in 2025 despite the OPEC+ decision to postpone planned supply increases and extend deep output cuts to the end of 2026, according to Reuters.
Brent crude futures were down 66 cents, or 0.9 percent, to $71.43 per barrel at 2:28 p.m. Saudi time. US West Texas Intermediate crude futures were down 65 cents, or 1 percent, to $67.65 per barrel.
For the week, Brent was on track to fall 2 percent, while WTI was on course for a 0.5 percent drop.
The Organization of the Petroleum Exporting Countries and its allies on Thursday pushed back the start of oil output rises by three months until April and extended the full unwinding of cuts by a year until the end of 2026.
The group, known as OPEC+ and responsible for about half of the world's oil output, was planning to start unwinding cuts from October 2024, but a slowdown in global demand — especially in China — and rising output elsewhere have forced it to postpone the plan several times.
“The outcome of the latest meeting of OPEC+ members surprised us positively ... The extension of the production cuts shows the group remains united and is still targeting to keep the oil market in balance,” UBS analyst Giovanni Staunovo said.
Pressuring prices on Friday, analysts reiterated expectations of a supply surplus next year, although some of them now view a smaller surplus than before.
Bank of America forecasts increasing oil surpluses to drive Brent to average $65 a barrel in 2025, while expecting oil demand growth to rebound to 1 million barrels per day next year, the bank said in a note on Friday.
HSBC, meanwhile, now expects a smaller oil market surplus of 0.2 million bpd, from 0.5 million bpd previously, it said in a note.
Brent has largely stayed in a tight range of $70-75 per barrel in the past month, as investors weighed weak demand signals in China and heightened geopolitical risk in the Middle East.
“The general narrative is that the market is stuck in its rather narrow range. While immediate developments might push it out of this range on the upside briefly, the medium-term view remains rather pessimistic,” PVM analyst Tamas Varga said.
